PricewaterhouseCoopers Presentation to The Helplines Association 6 April 2011

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PricewaterhouseCoopers Presentation to The Helplines Association 6 April 2011

  1. 1. The Helplines Association<br />Planning for change <br />6 April 2011<br />
  2. 2. Who am I?<br />Slide 2<br />Ian Oakley Smith – Specialist in charity turnaround<br /><ul><li>Chartered accountant and Licensed Insolvency Practitioner
  3. 3. Specialist in turnaround and restructuring for charities and other not-for-profit entities
  4. 4. Worked with wide range of charities and social enterprises, typically small to mid-sized charities experiencing some sort of financial difficulty
  5. 5. Part of the PwC Charities Team
  6. 6. A member of the Committee of the ICAEW Charities and Voluntary Sector Special Interest Group</li></li></ul><li>Agenda<br />Presentation<br /> The changing environment<br /> The importance of planning<br /> Responding to change<br /> Asking the tough questions<br />Discussion<br />Questions<br />Slide 3<br />
  7. 7. Key Messages<br /><ul><li>The environment is changing like never before
  8. 8. Charities need to respond
  9. 9. There are both risks and opportunities
  10. 10. Planning and information are crucial
  11. 11. The success of the organisation may depend upon asking the tough questions now</li></ul>Slide 4<br />Charities must embrace the need for leadership –<br />how can you influence this?<br />
  12. 12. Slide 5<br />Wordle on Big Society from NCVO<br />The changing environment<br />
  13. 13. The importance of planningRisk touches every part of your organisation<br />Risk assessment processes<br />Operational<br />Governance<br />Reputational and external<br />Environmental <br />Financial<br />(Charity Commission CC26 – Risk Management) <br />Slide 6<br />More than ever before risk needs to be properly addressed<br />
  14. 14. Charity Commission publicationsCC26 – Charities and Risk Management<br />Slide 7<br />What is your risk appetite?<br />
  15. 15. The importance of planningWhy do charities fail?<br />Slide 8<br />Predictable income flows<br />Need to track trends in income<br />Most comfortable model<br />Flexible cost base<br />Fixed cost commitments<br />Most vulnerable position<br />Need to understand reserves policy<br />Unreliable income<br />
  16. 16. The importance of planningWhy do charities fail?<br />Slide 9<br />Predictable income flows<br />Need to track trends in income<br />Most comfortable model<br />Actually, it is almost invariably..<br />..weak planning and financial management<br />Flexible cost base<br />Fixed cost commitments<br />Most vulnerable position<br />Need to understand reserves policy<br />Unreliable income<br />
  17. 17. The importance of planning<br />Slide 10<br />Strategy<br />Scenario planning/risk assessment<br />Managementinformation<br />Governance<br />Reserves policy<br />
  18. 18. The importance of planning<br />Slide 11<br />Strategy<br />Scenario planning/risk assessment<br />Managementinformation<br />Governance<br />Reserves policy<br />Important when things are going well – VITAL in a downturn<br />
  19. 19. Responding to change<br />Slide 12<br />Sigmoid CurveFrom Charles Handy “The Empty Raincoat”<br />It’s hard to make change when things look on the up<br />Growth / performance<br />It’s much easier from a burning platform<br />Time<br />
  20. 20. Responding to change – what are the options?<br />Slide 13<br />Plan A<br />Diversify income<br />Assess Risks<br />Plan B<br />Streamline<br />Plan C<br />Focus on core<br />Evaluate Opportunities<br />Plan D<br />Collaborate->close<br />Consider all possibilities to benefit your beneficiaries<br />
  21. 21. Responding to change – assessing the options<br />Slide 14<br />Time is critical – how long does your charity have?<br />Diversify income<br />Streamline<br />Availability of options<br />Focus on core<br />Collaborate<br />Merge <br />Close<br />Time<br />Milestones<br />
  22. 22. Responding to change – assessing the options<br />Slide 15<br />What are your charity’s core activities?<br />Additional activity 2 etc<br />Discretionary costs<br />Additional activity 1<br />“Semi-fixed” costs<br />Core activities<br />Fixed overhead<br />
  23. 23. Asking the tough questionsWhy might your charity remain independent?<br />The right reasons?<br /><ul><li>To maximise fundraising opportunities
  24. 24. The desire of one or more individuals to create a lasting legacy
  25. 25. To be more responsive to the needs of a local community
  26. 26. The need to provide a specific service, perceived to be lacking previously</li></ul>The wrong reasons?<br /><ul><li>If it costs too much to support your beneficiaries
  27. 27. When you cannot take advantage of opportunities
  28. 28. When survival becomes your sole occupation
  29. 29. When you are less attractive to funders
  30. 30. If your Trustees are in it solely for egotistical reasons
  31. 31. If your strategy is influenced by your key Senior Managers’ fear for their future or that of their employees</li></ul>Slide 16<br />
  32. 32. Approaching the question with an open mind<br />Understanding the true cost of activities and overheads<br />Researching the market for potential partners<br />Benchmarking against other charities<br />Reviewing all areas of their costs<br />Making the best use of professional advice<br />Challenging the status quo and being strategic<br />What should Trustees and Senior Managers be doing?<br />Be prepared to have open conversations<br />
  33. 33. Discussion<br /><ul><li>We want you to move into groups to discuss the following questions:
  34. 34. What responses are open to helplines looking to secure their future?
  35. 35. How can you influence your helpline’s future?
  36. 36. What other types of organisation might your helpline collaborate or merge with?
  37. 37. We will then feed back and discuss as a group</li></ul>Slide 18<br />
  38. 38. Key Messages<br /><ul><li>The environment is changing like never before
  39. 39. Charities need to respond
  40. 40. There are both risks and opportunities
  41. 41. Planning and information are crucial
  42. 42. The success of the organisation may depend upon asking the tough questions now</li></ul>Slide 19<br />Charities must embrace the need for leadership –<br />how can you influence this?<br />
  43. 43. Contact<br />Ian Oakley-Smith, Director, PwC<br />T - 0207 212 6023<br />E - ian.oakley-smith@uk.pwc.com<br />Slide 20<br />
  44. 44. Thank You<br />

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